The murky world of Pay Parity...….and not just gender pay gap.

Life, society, politics, technology, media; we are all continuously moving forward, thinking forward and evidently proving that many things in this world are changing for the better. However, the global working culture is still falling behind on one controversial topic – salaries and pay bandings.

Between January 2017 and February 2019, nearly 1.8 million people took PayScale’s online salary survey, providing information about their industry, occupation, location and other compensable factors. They also reported demographic information, including age, gender, and race. In one year alone, London-based men earned ￡70 billion more than their female counterparts, and according to the community Every Woman, which helps support female entrepreneurs, it is estimated that it could take another 60 years to close the UK’s gender pay gap, and as many as 170 years to achieve global pay parity.

As organisations around the world take bold steps towards reducing the gender pay gap, it’s important not to lose sight of the importance of equal pay.

Pay bandings should be one solution to the equal pay challenge, yet interestingly, Bizfluent research showed that the implementation of pay grades may actually result in disputes among employees or potential hires regarding which pay banding they should be included in. Because pay bandings are more narrowly defined, one worker may find themselves excluded from the next pay band up, even if they have similar qualifications or experience to someone else who is earning more.

Similarly, a pay band may be too broadly defined. Some who hold with "senior" titles or positions may find themselves earning the same – or less than - those with less experience or responsibilities. The war for talent can result in market-driven pay structure where employees demand more money than the market warrants for their skill set.  Companies are spending significant resources in recruiting new members to join their organisation, but as the skills gap has become ever more apparent. In October 2018,  The Robert Half 2019 Salary Guide revealed that nearly five million small and medium sized companies, the equivalent of 82% are struggling to attract the skills they need. As a result, many are being forced to offer salary packages higher than originally expected to recruit the right talent.

The net result of all this research is still the same, it’s one of the most controversial topics in any workplace and needs handled with care. This combined with events that change the demand in a constantly changing world make it tricky to estimate the effects of wage increase, pay and reward and the effect both on recruitment and on employee engagement. It is however something that as we try and keep pace with our competition we need to be aware off.

The one piece of good news is with the rise in the availability of data through tech integrated in to your HRIS system can make reviewing role taxonomy and pay and reward much easier than in the past – the automation will enable proactive companies to be quicker to react and to perhaps win a battle in the war on talent.

Thank you for reading, please leave your thoughts in the comments below. 

Pete.